Home > July 2012 > Trading Diary July 9th, 2012 Day 8th of Iran Oil Embargo

Trading Diary July 9th, 2012 Day 8th of Iran Oil Embargo

July 7th, 2012
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China came out with lower CPI and PPI and below estimates, normally a lower amount would cause a rally in the market in the hopes of China Govt rate cuts..but instead the Shanghai Comp is selling off tonight along with rest of Asia. It could be fears of Deflation coming out of China, along with China Prez saying China will still be seeing downside. Shanghai Futures are down a little bit. EU meetings today in Brussels, the ESM is suppose to start today, but it could be delayed. Going into the europe session we have Eur/USD playing with June low at 1.2290ish and AUD/USD at 1.0190. This is even with German Import/Export data beating estimates with most all of it going to non EU countries. We have German and France debt sales tonight.

July 2012

  • Trading_Nymph

    NYSE advance-decline volume is still in a upside bias within a perfect downtrend after taking out support. For Monday it could be a KEY day, Next support which would give us a downside bias is -477,000,000 while resistance is at 346,000,000. Everyone is back on Monday..if the WSJ QE gossip on Friday is not believed then we could get that support test.

  • Trading_Nymph

    Brent Oil at 98.61 and WTI Oil at 84.47 going into the Europe Session, IMHO the strike talk in Norway reminds me of the copper strike talk in S.America..it really catches headlines, but really isn’t the moving event we all think it will be….anyway, (Reuters) – Brent crude climbed toward $99 a barrel on Monday as failed labor talks in Norway stoked worries of a total output shutdown, while hopes that China would ease monetary policy and improve fuel demand also supported prices.Data from top energy user China showed annual consumer inflation cooling further in June, leaving room for Beijing to ease policy without stoking upward price pressures and helping most commodities recover from steep losses triggered by bleak U.S. jobs data in the previous session.
    “We need to bear in mind that China does have its growth target,” said Michael Creed, economist at the National Australian Bank. “I do imagine they will do anything policy wise to achieve that. If they do, it will support oil prices.”
    Brent rose 54 cents to $98.73 a barrel by 0512 GMT after settling up a slight 0.4 percent last week in choppy trade supported by supply disruption fears from the Norway oil workers’ strike and a launch of tough Western sanctions targeting Iranian crude exports.
    Norway is the world’s eighth largest oil producer.
    U.S. crude was up 33 cents to $84.78 after falling 0.6 percent last week as tepid jobs growth in the United States dragged down global markets on Friday.
    But investors were far from making aggressive bets amid growing evidence of a shaky global economy, remaining cautious ahead of China’s GDP data which is scheduled for later this week and likely to show the weakest expansion in three years.
    Premier Wen Jiabao said on Sunday that China needs to aggressively fine-tune its economic policies to support its economy. In March, Wen cut the 2012 growth target to 7.5 percent, which would be the lowest since 1990.
    Slower economic growth in China and the United States, as the euro zone debt crisis continues, has led Brent to post a 20 percent fall in the second quarter, the largest three-month loss since the 2008 financial crisis.
    Euro zone finance chiefs will try to flesh out plans to reinforce the single currency on Monday but their talks in Brussels may do little more than highlight the limitations of last month’s deal to help indebted states and banks.
    “In the event that there are any delays in what was agreed to at the European Union Summit, financial markets would respond bearishly,” Jason Schenker, president of Texas-based consultancy Prestige Economics, wrote in a note.
    SUPPLY DISRUPTION
    Talks between Norway’s offshore oil workers and employers over pay and pensions failed for a third time on Sunday, raising the risk of a total shutdown in oil and gas production.
    The strike has already cut Norway’s oil production by about 13 percent and its gas output by about 4 percent and affected crude shipments. “The Norway strike is certainly providing support to oil prices,” NAB’s Creed said.
    Iran continues to search for ways to circumvent tough sanctions on its crude exports imposed by the United States and Europe to pressure Tehran to halt its disputed nuclear programme.
    The second largest OPEC producer has reached agreements with European refiners to sell some of its oil through a private consortium, an official told the local news agency on Saturday.
    Bad weather stopped crude exports from Iraq’s southern Basra terminals on Sunday although the Russian Black Sea port of Novorossiysk returned to normal operations on Sunday after a sudden flood forced the major export outlet for oil and wheat to suspend loadings.
    Libya has resumed oil production and exports after political protests last week while Yemen says it will resume oil exports from its Maarib province after attacks from militants halted shipments for over a year.

  • Trading_Nymph

    Interesting, China is buying up Oil rights from Iran during this embargo time period…Iran’s Oil Minister Rostam Qasemi says China has agreed to invest USD20 billion in developing north and south Azadegan and Yadavaran oil fields which will finally produce 700,000 barrels per day (bpd) of crude oil.

    Speaking to reporters in a visit to the Petropars Company on Sunday, the oil minister said the agreement for developing Azadegan and Yadavaran oil fields has been reached after 10-15 years of negotiations with the Chinese side.

    He added that the Chinese side has started its activities by investing USD20 billion dollars in the oil fields.

    “So far more than 20 drilling rigs have been installed in Azadegan and Yadavaran oil fields and plans have been made for the daily production of 700,000 bpd of crude oil [when development of both fields is complete],” Qasemi stated.

    The minister said contracts have been signed for the development of 12 new oil fields in the past few months, adding, “Development of some fields, including Azar and Changouleh oil fields has also begun.”

    Qasemi said necessary measures have been taken for the development of Darkhoein and Mansouri onshore oil fields as well as offshore fields such as Farzad A.

    Yadavaran oil field is located in the southwestern Khuzestan Province bordering Iraq. The development project of the oil field is expected to be implemented in three phases. Upon the completion of all phases, some 300,000 barrels of oil are expected to be pumped out on a daily basis.

    Azadegan oil field has one of the world’s largest oil deposits, with in-place oil reserves estimated at 42 billion barrels.

    Iran holds the world’s third-largest proven oil reserves and the second-largest natural gas reserves.

    The country’s total in-place oil reserves have been estimated at more than 560 billion barrels, with about 140 billion barrels of extractable oil. Moreover, heavy and extra heavy varieties of crude oil account for roughly 70-100 billion barrels of the total reserves.

  • Trading_Nymph

    China CPI and PPI came in lower then estimates, food/hogs still keeping it low…from Shanghai Daily..INFLATION expanded at the slowest pace in 29 months in June, much weaker than expected and allows more room for policy easing to encourage growth in an economy where a deepening downturn is feared.

    The Consumer Price Index, the main gauge of inflation, rose 2.2 percent from a year earlier last month, the National Bureau of Statistics said this morning. It compared with a 3 percent increase in May and was less than market estimates of around 2.4 percent.

    Food costs, which make up nearly one third in the basket, gained 3.8 percent in June, down from 6.4 percent year-on-year growth in May and contributing the most to the CPI slowdown.

    “The data confirms that inflation is no longer the top priority,” said Li Maoyu, an analyst at Changjiang Securities Co. “The sharper-than-expected slowdown in inflation suggests insufficient domestic demand, and may invite policy-makers to launch more supporting measures.”

    The People’s Bank of China cut interest rates surprisingly last week. It was the second time in a month that lending rates were cut to bolster growth.

    While the one-year deposit rate was cut 0.25 percentage points, the one-year lending rate fell by 0.31 percentage points to 6 percent – an asymmetrical move apparently aimed at encouraging businesses to borrow money.

    Many analysts fear the downturn will deepen. The interest rate cuts came after data showed manufacturing activity in June expanded at the slowest pace in seven months.

    China’s gross domestic product figure for the second quarter is scheduled to be released on Friday. Some economists said growth will likely moderate further to around 7.6 percent after an 8.1 percent rise in the first quarter, the slowest in nearly three years.

    Easing inflation provided room for more stimulus policies, Li said. In the first six months, inflation advanced 3.3 percent, compared with last year’s 5.4 percent.

    The Producer Price Index, the factory-gate yardstick of inflation and a harbinger of future consumer prices, dropped 2.1 percent from a year earlier in June. It was the fourth straight monthly loss and compared to May’s 1.4 percent fall.

    Liu Ligang, an economist at Australia and New Zealand Banking Group, warned if inflation were to continue to drop at such a pace, the risk of deflation could appear.

    “This means the existing output gap is larger than expected,” Liu said in a note. “The rising output gap will allow more aggressive policy easing. Such expectations will push market rates down further, favoring high-yield assets.”

  • Trading_Nymph

    From the NY Times…Chinese Premier Urges Action to Spur Economy
    By KEITH BRADSHERPublished: July 8, 2012
    FacebookTwitterGoogle+EmailSharePrintReprints
    HONG KONG — Premier Wen Jiabao of China warned on Sunday of “huge downward pressure” on the Chinese economy, in the clearest expression yet of concern at the top of the country’s leadership about a sharp slowdown in recent months.
    Enlarge This Image
    Claudio Santana/Agence France-Presse — Getty ImagesPremier Wen Jiabao attributed China’s slowdown largely to weak demand from abroad.
    During a weekend inspection tour of east-central China, Mr. Wen called for the government to “preset and fine-tune its policies in a more aggressive manner,” using fiscal and monetary tools to offset the economic slowdown as much as possible. But he also tried to reassure the public, saying the economy was “running at a generally stable pace,” said Xinhua, the official Chinese news agency. Mr. Wen largely attributed the slowdown to weak demand from overseas, particularly Europe with its faltering economies. But in separate remarks on Saturday, he reaffirmed a government policy of making real estate prices more affordable by banning real estate speculation. That policy has played a central role in China’s economic slowdown, as housing construction has slowed to a crawl except for subsidized housing for lower-income families. Developers across the country have laid off huge numbers of workers. Construction sites from the steamy factory cities of Guangdong in the southeast to manufacturing and logistics hubs like Xi’an in the northwest have cut back this year from three shifts working around the clock, seven days a week, to one day shift on weekdays. Scant accurate data is available on the extent of the decline in real estate prices. Brokers say prices have fallen 20 percent or more in the last year. A monthly government survey of older neighborhoods where few transactions take place shows a much smaller decline, however, while a separate survey of real estate developers shows that few acknowledge the steep discounting described by brokers. Broader price gauges are starting to show signs of deflation, as the supply of goods overwhelms weak demand. The Chinese government announced on Monday morning that producer prices fell 2.1 percent in June from a year earlier. Consumer prices were only up 2.2 percent in June from a year ago, and actually dropped 0.6 percent from May. The Chinese central bank announced on Thursday that it was cutting the country’s regulated bank lending and deposit rates for the second time in four weeks, an uncharacteristically brisk pace. The cuts have started to rekindle the Chinese public’s enthusiasm for real estate investments, with the number of transactions starting to quicken in recent weeks. But the central bank warned banks on Thursday to keep a tight rein on mortgage lending, and Mr. Wen said on Saturday that the government’s policy of improving the affordability of real estate had not wavered. “To further implement the regulation,” Xinhua said, “Wen urged unswerving efforts to ensure prices return to reasonable levels, and block a price rebound that would undermine the effects of previous efforts.” Informal tallies suggest that about a third of China’s 100 largest cities have loosened the ban on real estate speculation in recent weeks to revive local markets. Mr. Wen warned that these loosening moves must be halted and reversed, and even threatened punishment for officials who tried to “cheat” on the restrictions. Sales of land leases are a critical source of revenue for local governments, so the downturn in real estate markets has hurt their finances. Many of these governments are deeply in debt after spending lavishly in 2009 and 2010 on infrastructure projects like airports, highways and high-speed rail to offset the effects of the global economic slowdown. The Chinese government has already adopted policies to support the rest of the economy. In addition to the interest rate cuts, the government has freed banks to lend a larger share of their deposits, subsidized the sale of energy-saving home appliances and accelerated the approval of large construction projects. During his inspection tour over the weekend, Mr. Wen hinted at further measures, including tax credits for companies that invest in research and development. He urged Chinese businesses to pursue export opportunities in Southeast Asia, Central Asia and South Asia as alternatives to industrialized countries where protectionist pressures might build. Despite these efforts in recent weeks, economic data for June and for the second quarter, scheduled to be released this week, is expected to show further weakness. April and May data showed unusually slow growth in retail sales, investment, electricity consumption and other barometers of economic growth. As electricity demand has slowed, so much unneeded coal has accumulated that storage areas at major Chinese ports are at record levels and arriving ships full of coal must wait many days to unload. Piles of mined coal fill empty lots and line roadsides in some mining areas in northern China, as mine owners maintain production while hoping prices will recover.

  • Trading_Nymph

    Friday gives us China GDP data, we also get Fed minutes on Wed.

  • Trading_Nymph

    After the close we get the “Official Start” of Earnings with AA and WD40 reporting.

  • Trading_Nymph

    My Acid Test,Acuity Brands, AYI has been holding up pretty good, it beat on Earnings last week and has kept its profit so far.

  • http://pulse.yahoo.com/_BYIE4IB7HKSGYHBPVW6MT4DEIE Iron
  • http://pulse.yahoo.com/_BYIE4IB7HKSGYHBPVW6MT4DEIE Iron
  • Trading_Nymph

    I saw him on Bloomberg last night. I am looking for 557 on the SPX, but that is a GANN analysis I did in 2009. Gann was a very interesting guy and based on his thesis that would be the key number  I believe. Also, I agree about 2008 because the Keynes Thesis of flooding the economy with cash has inflated commodity production in mega dosages but DEMAND of real use continues to fall..can get VERY ugly. China is worried about deflation, we should too.

  • Trading_Nymph

    Eur/USD at 1.2300 and AUD/USD at 1.0177 with OBAMA on.

  • Trading_Nymph

    Doing some fibo, Looking at JNK, it has been in a rally mode since May over BoE QE hopes, ECB talk of LTRO/rate cuts. Since then it is above all key Fibo levels on the daily multi month..but over the last few years it can’t push higher then these MA’s and it could collapse or sit here….KEY LEVELS 39.23, 39.10, 38.58…..without LTRO/QE I expect it to go bye bye

  • Trading_Nymph

    Looking at AA going into earnings, AA is dull falling knife, key support is 8.64 and resistance is 8.88…looking at levels 15.28 resistance and 5.23 is support. With all of the Al in speculators hands at the LME as they move it to one location to another, the only thing that makes sense is the 5.23 level imho.

  • Trading_Nymph

    For our SPX on the daily multi month, 1259.89 is resistance and 1342.21 is still support, with minor support at 1339.03…if that is gone, we should free fall to 1285.81 ish.

  • Trading_Nymph

    Intraday, SPX is at KEY resistance and have to hold 1349.02..1350.55 is next stop.

  • Trading_Nymph

    Daily Fibo ala Nymph for the SPX
    RatioPrice
    1371.93
    1364.56
    1359.99
    1357.17
    1355.43
    1354.83
    1354.35
    1354.02
    1353.69
    1353.28
    1352.61
    1351.94
    1351.53
    1351.20
    1350.87
    1350.39
    1349.79
    1348.05
    1345.23
    1340.66
    1333.29

  • Trading_Nymph

    VXX is red..it really is a falling knife. It had a fat finger drop in 2010 to 13, but at this point it at its all time low if you take it out.

  • Trading_Nymph

    There is no fear in this market based on lack of Put buying

  • Trading_Nymph

    NYSE advance-Decline Vol is at -121,000,000 this is really light volume after a return from July 4 week.

  • Trading_Nymph

    SPX intraday is holding resistance, 1348.27ish is support

  • baronadv

    even im adding shorts….and my stomach is growling

  • Trading_Nymph
  • Trading_Nymph

    Baron! For a bull to growl is something you don’t see everyday, even if its just his stomach.. :-)

  • baronadv

    im not so bullish right now…i really think we need to correct if we are to have a fall rocket blast

  • Trading_Nymph

    Oil 85.93…funny, Oil, Corn, Eur/USD is stronger but market is weak.

  • Trading_Nymph

    Oil is still get buyers on that Norway Strike, like whatever, lol. Our EU per AP is busy with”Monday evening, the so-called eurogroup of finance ministers will attempt to reach an agreement on what conditions will be attached to Spain’s bank bailout loan, which will codified in a “memorandum of understanding” to which the country must agree. The 17 ministers — some of whom will need to get approval of the agreement from their parliaments — will probably meet again, later in July, to give final approval to that document.

  • http://pulse.yahoo.com/_BYIE4IB7HKSGYHBPVW6MT4DEIE Iron
  • Trading_Nymph

    Brent 100.19…100 is one heck of a resistance point.

  • Trading_Nymph

    I didn’t even know they sold derivative contracts that wager on a decline in the consumer-price index…learn something everyday. His analysis makes total sense, if we lived in China I would worry about Food Inflation effecting our CPI, but USA CPI is not that dependant on food.

  • Trading_Nymph

    eur/usd 1.2312 and AUD/USD 1.0194..China had a big sell off last night, will be curious to see it continue…I am falling asleep…zzzzzz